Unassociated Document


    EXHIBIT
      10.38

    CONSULTING
      AGREEMENT

    


    


    This
CONSULTING
      AGREEMENT
      (the “Agreement”)
      is entered into as of June 30, 2008 by and between TRUE
      NORTH
      ENERGY CORPORATION,
      a Nevada
      corporation, with its principal offices at 2 Allen Center, 1200 Smith Street,
      Houston, TX 77002 (the “Company”) and PRIME
      NATURAL RESOURCES, INC.
      with an address at
      2500 CityWest Blvd, Suite 1750, Houston, TX 77042 (“Prime”).

    


    WHEREAS,
      the
      Company wishes
      to engage Prime to provide accounting and related services to the Company and
      the Prime wishes to accept such engagement, all upon the terms and subject
      to
      the conditions contained in this Agreement;

    


    NOW,
      THEREFORE, the
      parties hereto,
      in consideration of the mutual consideration and promises contained herein
      and
      intending to be bound, hereby agree as follows:

    


    1. Retention
      of Prime.
      The Company hereby
      retains Prime, and Prime agrees to be retained by the Company, upon the terms
      in, and subject to the conditions of, this Agreement.

    


    2. Term.
      Subject to Section
      7 hereof, the term of this Agreement shall commence on July 1, 2008 (the
“Effective Date”) and shall continue in effect for one year thereafter through
      and including June 30, 2008.

    


    3. Duties
      of Prime.
      During the term of
      this Agreement, Prime shall provide such bookkeeping, accounting and financial
      reporting services and work with the Company’s chief executive officer as may be
      directed by the Company from time to time. Prime makes NO WARRANTY, express
      or
      implied, as to merchantability, fitness for purpose sold, description, quality
      or productiveness concerning the services provided hereunder.

    


    4. Compensation.
      

    


    (a) Consulting
      Fee: As
      compensation to
      Prime for the services to be rendered under this Agreement, the Company shall
      pay to Prime a consulting fee consisting of a monthly $5,000 cash payment (the
      “Cash Consulting Fee”) and grant to Prime an issuance of $60,000 in common stock
      of the Company (the “Stock Consulting Fee”) for each calendar year quarterly
      period (i.e.,
      the three months
      ending on September 30, 2008, December 31, 2008, March 31, 2009 and June 30,
      2009 and each being a “Quarter”). 

    


    (b) Payment
      of Cash
      Consulting Fee: The Company will pay the Cash Consulting Fee to Prime monthly
      in
      advance no later than the 20th
      day of the month
      prior to the month in which services will be performed. 


    
      
         

      

      
        
        

        
          

        

      

      
         

      

    


    


    


    (c) Payment
      of Stock
      Consulting Fee: In connection with the Stock Consulting Fee, the Company will
      issue to Prime an amount of stock equal to the Stock Consulting Fee no later
      than ten (10) business days of the completion of each Quarter. The number of
      shares to be issued for each such Quarter will be determined by taking the
      sum
      of the shares for each month in such Quarter as the shares for each such month
      are determined by apportioning a number of shares equal to the amount of $20,000
      as based upon the average closing price of the Company’s common stock on the OTC
      Bulletin Board for the last five business days of each month in each such
      calendar year quarterly period then ended. In connection with the payment of
      the
      Cash Consulting Fee, Prime

    shall
      be granted
“piggyback” rights pursuant to which Prime may request that the Company include
      the stock provided as the Stock Consulting Fee in any registration statement
      filed with the Securities and Exchange Commission to register other common
      stock
      of the Company (other than a registration on Form S-4 or S-8, or any successor
      or other forms promulgated for similar purposes). 

     

    (d) Adjustments:
      In the
      event of early termination of this Agreement by either party, Prime’s cash
      payment for the month in which the Agreement will terminate will be subject
      to a
      pro rata adjustment to reflect the number of days in such month that Prime
      will
      be providing consulting services. In the event of early termination by the
      Company “With Cause” or by the Prime other than for “Good Reason,” as such terms
      are defined in Section 7 hereof, Prime’s stock payment will be subject to a pro
      rata, downward adjustment to reflect the number of days during which this
      Agreement was in effect.

    


    (e) Expenses:
      The
      Company shall reimburse Prime for all reasonable out-of-pocket business expenses
      incurred by Prime in the performance of this Agreement. Any single expense
      amount in excess of $1,000 will require advance written approval from the
      Company.

    


    5. Status
      as Independent Contractor.
      The parties intend
      and acknowledge that Prime is acting as an independent contractor. The Company
      shall not be responsible for any withholding in respect of taxes or any other
      deductions in respect of the fees to be paid to Prime and all such amounts
      shall
      be paid without any deduction or withholding. Nothing in this Agreement shall
      be
      construed to create any partnership, joint venture or similar arrangement
      between the Company and Prime or to render either party responsible for any
      debts or liabilities of the 

    


    6. Indemnity
      and Limitation of Liability.
      Except as
      otherwise arising from or attributable to the gross negligence of Prime, the
      Company shall indemnify, protect, defend and hold Prime and its employees,
      officers, directors and shareholders harmless from and against any and all
      liabilities, claims and causes of action, including without limitation, all
      legal fees and expenses incurred by Prime and its employees, officers, directors
      and shareholders in the prosecution, defense, settlement or investigation
      thereof, that shall arise or result from the services performed by Prime
      hereunder or that may otherwise relate to this Agreement. Neither party hereto
      shall be liable to the other for any consequential, special, punitive or
      indirect damages arising out of this Agreement. The maximum liability hereunder
      of Prime shall be limited to the actual amounts of the Cash Consulting Fee
      and
      Stock Consulting Fee that it receives from the Company.

    


    7. Confidentiality.
      Prime acknowledges
      that in connection with the services to be rendered under this Agreement, Prime
      may be provided with confidential business information of the Company. The
      information will include, but not be limited to, competitive information
      pertaining to the Company’s employees, business partners, land and lease
      holdings, financial results and drilling and exploration activities. Prime
      agrees to keep any information or materials (the “Confidential Information”) in
      the strictest confidence and not to disclose or disseminate any such
      Confidential Information to any person, firm or other business entity except
      to
      those employees, Prime’s or other independent contractors of the Company as
      shall be necessary or advisable for the carrying out of the purposes of this
      Agreement.


    
      
         

      

      
        2

        
          

        

      

      
         

      

    


    


    


    All
      materials
      relating to the business and affairs of the Company, including, without
      limitation, all manuals, documents, reports, equipment, working materials,
      lists
      of shareholders, customers and clients, and information collected or prepared
      by
      the Company or Prime in the course of Prime's engagement, are the property
      of
      the Company. Upon the termination of this Agreement for any reason, Prime shall
      cease the use of such materials, return them to the Company (including all
      copies and reproductions that may have been made or received), and delete
      related information from all retrieval systems and databases used by
      Prime

    


    Information
      will
      not be deemed to be Confidential Information restricted by this Section 6 if
      Prime can show that: (i) the information was in Prime’s possession or within
      Prime‘s knowledge before the Company disclosed it to Prime; (ii) the information
      was or became generally known to those who could take economic advantage of
      it;
      (iii) Prime obtained the information from a party having the right to disclose
      it to Prime without violation of any obligation to the Company, or (iv) Prime
      is
      required to disclose the information pursuant to legal process (e.g., a
      subpoena), provided that Prime notifies the Company immediately upon receiving
      or becoming aware of the legal process in question. No combination of
      information will be deemed to be within any of the four exceptions in the
      previous sentence, however, whether or not the component parts of the
      combination are within one or more exceptions, unless the combination itself
      and
      its economic value and principles of operation are themselves within such an
      exception or exceptions. 

    


    8. Termination.
      Either party may
      terminate this Agreement for any reason upon 30 days prior written notice,
      including but not limited to termination by the Company “With Cause” or
      termination by the Prime for “Good Reason”.

    


    “With
      Cause” shall
      be (i) Prime’s willful, material and irreparable breach of this Agreement, (ii)
      Prime’s willful dishonesty, fraud or material misconduct with respect to the
      business or affairs of the Company; (iii) Prime’s conviction for a felony; (iv)
      Prime’s gross negligence in the performance of his duties hereunder, or (v)
      Prime’s intentional nonperformance of his duties hereunder.

    


    “Good
      Reason” shall
      exist if the Company does not pay any material amount of compensation due Prime
      hereunder within seven (7) days of the due date thereof provided that Prime
      shall have provided the Company with written notice of such default and given
      the Company 3 business days to cure such default.

    


    9. Amendments,
      Modifications, Waivers, Etc.
      No amendment or
      modification to this Agreement, nor any waiver of any term or provision hereof,
      shall be effective unless it shall be in a writing signed by the party against
      whom such amendment, modification or waiver shall be sought to be enforced.
      No
      waiver of any term or provision shall be construed as a waiver of any other
      term
      or condition of this Agreement, nor shall it be effective as to any other
      instance unless specifically stated in a writing conforming with the provisions
      of this Section 8.


    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    


    


    10. Successors
      and Assigns.
      This Agreement
      shall be enforceable against any successors in interest, if any, to the Company
      and the Prime. Except as specifically provided herein, neither the Company
      nor
      the Prime shall assign any of their respective rights or obligations hereunder
      without the written consent of the other in each instance.

    


    11. Counterparts.
      This Agreement
      may be executed in two or more counterparts, each of which shall be deemed
      an
      original, but all of which together shall constitute one and the same
      instrument. 

    


    12. Notices.
      Any notices
      required or permitted to be given under this Agreement shall be effective upon
      receipt at the respective addresses in the recitals to this Agreement unless
      the
      address for notice to either party shall have been changed by a notice given
      in
      accordance with this Section 11.

    


    13. Governing
      Law; Dispute Resolution.
      This Agreement
      shall be governed by, and construed in accordance with, the substantive laws
      of
      the State of Texas, without regard for principals of conflicts of laws. Any
      claims, demands, differences, causes of action, disputes, or controversies
      arising out of or in connection with this Agreement shall, as far as possible,
      be settled amicably. Failing an amicable settlement within thirty (30) days
      of
      the written notification by one Party to the other of such difference or
      dispute, such difference or dispute shall be referred to arbitration. The
      arbitration shall be governed by, be conducted under, and finally settled in
      conformance with the Rules of American Arbitration Association in effect on
      the
      date of this Agreement. The arbitral panel shall be composed of three
      arbitrators. Each Party shall appoint one arbitrator within thirty (30) days
      of
      the filing of the arbitration, and the two arbitrators so appointed shall then
      select the presiding arbitrator within thirty (30) days after the latter of
      the
      two arbitrators have been appointed. If a Party fails to appoint its
      Party-appointed arbitrator or if the two Party-appointed arbitrators cannot
      reach an agreement on the presiding arbitrator within the specified time period,
      then the President of the American Arbitration Association shall nominate the
      remainder of the three arbitrators not yet appointed. The arbitration shall
      take
      place in Houston, Texas and the proceedings shall be in the English language.
      


    
      
         

      

      
        4

        
          

        

      

      
         

      

    


    


    IN
      WITNESS
      WHEREOF,
      the parties hereto
      have set their respective hands this 30th day of June 2008.

    


    
      	
              TRUE
                NORTH ENERGY CORPORATION

            	
              PRIME
                NATURAL

            
	 	 	 	
              RESOURCES,
                INC.

            
	 	 	 	 	     
	 	 	 	 	     
	
              By:

            	
              /s/
                John
                Folnovic

            	 	    
	
              /s/
                John R.
                Hager

            
	 	
              Name:
                John
                Folnovic

            	 	
              Name:

            	
              John
                R.
                Hager

            
	 	
              Title:
                President

            	 	
              Title:
                

            	
              Chief
                Financial Officer

            


    

    


    
      
         

      

      
        5